This plan scheme has been continuing since 1957-58 with a view to augment the financial position of the Gram Panchayat/ Panchayat Samitis in the State and to enable them to take up development works in their areas for the benefit of Panchayat/ Panchayat Samitis. Under this scheme interest free loan is given to Panchayat/ Panchayat Samitis for installation of Tube wells, Pumping sets on shamlat land, construction of shops at bus stand and construction of staff quarter etc. The loan is recoverable in 30 yearly installments.

Under the scheme, an amount of Rs.1900.00 lacs has been approved for the 12th Five Year Plan (2012-17). An outlay of Rs.150.00 lakhs had been provided for the year 2016-17, out of which Rs.38.90 lakhs have been released. In the year 2017-18, an amount of Rs.120.00 lakhs were sanctioned in the revised budget, out of which Rs.32.25 lakhs had been released. An amount of Rs.256.22 lakhs have been spent during the present Govt.tennure. A budget provision of Rs.180.00 lakhs has been made for the year 2018-19, out of which an amount of Rs.57.26. lakh have been released so far.